In Canada in 2010 there were 42,314 consumer proposals filed in Canada, an increase of 19.8% over the 35,331 consumer proposals filed in Canada in 2009.
In the twelve months ended June 30, 2011 there were 44,156 consumer proposals filed in Canada, so on an annualized basis, the number of consumer proposals is increasing.
That increase is even more striking when you compare it to the twelve months ended June 30, 2010, when there were only 39,873 consumer proposals filed. In percentage terms, over the past year, the number of consumer proposals filed in Canada has increased by 10.7%
In the year ended June 30, 2011, while consumer proposal filings increased by 10.7%, the number of personal bankruptcy filings in Canada actually fell by 19.1%, from 105,360 to 85,236.
Clearly, Canadians are choosing to file consumer proposals as an alternative to bankruptcy.
The main reason for this change is that bankruptcy rules were changed in 2009 to make filing bankruptcy in Canada more costly for some people.
For example, if you file bankruptcy and your income is higher than the limit set by the government, you are required to pay a surplus income penalty in bankruptcy.
So, by filing a consumer proposal, your monthly payment may be lower, and you know exactly what you are required to pay, which accounts in part for the increase in consumer proposal filings in Canada.
Please see our article on the advantages of filing a consumer proposal for more information.